PayPal to Cash in on Mobile Technology
Many retailers are experiencing record online sales as more and more people forgo
the high street in favour of the convenience and choice that the Web affords. But according to experts mobile Web will be bigger than desktop internet use by 2015 and PayPal are planning on cashing in on new wave before it engulfs them.
"Where are we going next is anything that is mobile, anything that is digital and lots and lots of e-commerce online payments," PayPal President Scott Thompson has recently said.
Parent company eBay are relying more and more on PayPal to bring home the bacon and PayPal are confident that micro payments' will be lucrative as they tap into new markets.
PayPal's future strategy is more than allowing phone subscribers to buy goods and pay for services from Mobile sites though, they are developing
ecommerce software that will allow PayPal users to use their mobile as a digital wallet' in real stores. The software, which will be unveiled at a PayPal conference in October, will allow consumers to buy goods by tapping their handsets on point-of-sale terminals and store coupons and loyalty program data on their mobile.
The ecommerce business is planning on gaining a foothold in a $2.4 trillion market currently controlled by credit card companies such as Mastercard and Visa.
MasterCard have already developed adhesive tags that allow consumers to pay for items by waving in front of point-of-sale terminals and Visa have a chip-based payment system for phones in the pipeline. But experts are predicting that PayPal's strong grasp of innovative technology, especially risk and fraud management, and understanding of customers' demands puts them in good stead to become the leading player.
PayPal's move into real-world payments comes as eBay increasingly leans on the unit to fuel growth while it turns around its auction-and-sales business. Last year, PayPal contributed 32% of eBay's $8.7 billion in annual revenue, a share that is seen to increase as the payment unit looks to new users and markets.
PayPal's contribution could jump significantly if it grabs a slice of the roughly 95% of U.S. retail sales that are conducted at stores and malls. That could eventually help support eBay's stock, which has fallen 8% so far this year.
Still, industry executives say the field is open because none of the credit card companies has established a lead at this point. Rick Wilson, president of ecommerce software maker MSB Acquisition Inc., said PayPal has the ecommerce experience, user base and technology it needs to succeed.
"PayPal would be a leading candidate for turning my phone into a credit card," Wilson said.
Bling Nation CEO Meyer Malka said PayPal's in-store transaction fees are "a fraction" of what Visa and MasterCard charge to process credit or debit card payments.
This plan to grab a share of the reported $2.4 trillion market dominated by credit card companies, surely underlines the self confident air of a company that has already changed the way people pay for things over the internet in its 12 short years.
"We started on eBay and ventured into off eBay businesses but it was all e-commerce and that was where our focus was," said PayPal president Scott Thompson, who formerly worked for Visa.
When Mr Thompson says "lots and lots" he means hundreds of millions. At the moment PayPal has 87m active customers and 8m active merchants. He noted that while there are over 1bn people online, there is something like 5bn cell phones in the world.
The new offerings include smartphone applications, partnerships with Facebook and Google, micropayment solutions and a number of third parties that have integrated PayPal into their applications. Reports abound that the firm is also in talks to embed its payments platform on Android, Google's mobile operating system.
PayPal to Cash in on Mobile Technology
By: jon smith
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